The mysterious 1.5 metre (5ft) jellyfish was found by Josie Lim and her family as they stayed in Hobart, southern Tasmania.
Twelve-year-old Xavier Lim was walking along the beach when he spotted the giant jelly.
He said: "We were at the beach looking for shells and then dad said 'whoa look at that.' I touched it it was pretty cool."
The jellyfish breed has yet to be named by scientists but experts at the Commonwealth Scientific and Industrial Research Organisation (CSIRO) are currently working to classify the new species.
CSIRO scientist Lisa-ann Gershwin, who has studied jellyfish for 20 years, told ABC Local Radio: "It's a whopper. We do get large jellyfish and this one just happened to be this absolutely enormous specimen."
She explained that while the species had been seen before, it is unclassified and new to science and is probably the biggest ever seen in Australia. The discovery was found stranded belly-up and is part of the Lion's Mane group, Dr Gershwin explained.
"It's one of these things that really makes us come face-to-face with the fact that there are things we don't know about out there in nature, particularly in the ocean," she added.